Moving To Spain - Frequently Asked Questions

How does tax work in Spain?

There are similarities between the Spanish system and the tax systems in other countries. For example, Spanish employment income is taxed in a way similar to PAYE in the UK. Other parts are different. Here are the main differences in the tax systems.

• The tax year in Spain is the Calendar Year
• Capital Gains tax rates are in bands and are progressive. The more gain in any one year moves into a higher band, the higher percentage tax rate. The amount of gain is based on all sales in total, not on each individual transaction. If your total gain were €5,999 the tax rate for that gain is 19%. If you have gains from three different sources, for example, a property sale, an investment sale and bank interest, the rates of tax would be 19% for the first €6,000 of gain and 21% on the next €44,000. There are further bands above these rates.
• There is gift tax, including for gifts to family members
• Spain has a Wealth tax
• The individual who has to pay Inheritance tax is the person receiving the inheritance.
• There are 17 Autonomous Communities, many of which have tax raising powers.

Will I still have to pay tax in the country I have come from as well as in Spain?

Quite possibly. It depends on which was your home country. The USA and to some degree the UK have requirements to pay tax even if you are a tax resident in Spain. However, Spain has double taxation agreements with many countries, including the UK and the USA, where tax paid in one country will be offset against tax paid in Spain.

What do I need to do before I move to Spain?

If you are moving from the UK, there are a number of things which are better completed before you move. You can find out what you should do in our video "Relocating to Spain"

What do I need to do on arriving in Spain?

We recommend that as soon as you have settled into your new accommodation you explore financial advisers who can help you set off on the correct course for living in Spain. An adviser who not only has professional expertise on the subject but one who has practical experience of living in Spain for themself.

Why is this important? Firstly, If you set up your affairs in Spain without advice, you may have to undo the things you have just put in place. This can be costly and is often very time consuming. Secondly, the systems of getting yourself set up can feel bureaucratic, very long winded and often confusing. A financial adviser who has made the move to Spain and has gone through the processes of becoming a resident, will help keep you on the right track and save you a great deal of time.

How easy is it to set up a bank account?

The process of setting up a bank account is quite straightforward in Spain. You will need your passport, a proof of address and your NIE. Your NIE is the Número de Identificaciòn de Extranjero (Identification Number of a Foreigner). You may wish to get help to apply for this number.

Do you work with other specialists for Visas etc.

We regularly work with advisers to supplement our services to clients.

• Specialist Visa Lawyer
• Wills and Inheritance tax Lawyer
• Income and Capital Gains tax Lawyer
• Conveyancing Lawyer
• Currency Exchange Specialists

Do I need to move my savings and pensions to Spain?

No, you do not need to move any of your pensions and savings. However, you may wish to move some to make them tax efficient in Spain and/or to give you a regular income without worrying about the variation in exchange rates etc. Pensions, if coming from the UK, may be best left in the UK until you have had advice about both the UK and Spanish pension rules.

What do I have to do to ensure I am doing the right thing in the UK and in Spain?

The best answer to this question is at "Why a Financial Adviser is essential for expats living in Spain".

If you help me now, will you continue to provide advice and support?

At the Spectrum IFA Group, we provide ongoing support to our clients by regular reviews, updates about change in tax laws and more. By actively checking with you if your personal circumstances have changed, we can update your planning so it remains relevant and beneficial to you and your family.

Our Trust Pilot reviews repeatedly comment on how Spectrum advisers have helped clients over many years, the longest having been helped for 30 years! The reviews also comment on how responsive we are to clients when they need help.

Further information

Free Guide to Moving to Spain - Financial Planning Opportunities is available here

Find your Spectrum IFA Group local adviser here

To arrange an introductory call, please email info@spectrum-ifa.com with your name, telephone number and which part of Spain you live in. .

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.